Higher Education in New Zealand:
What might the UK learn?
HEPI Report 87
About the Author
Sam Cannicott was the Education Policy Adviser for the Liberal
Democrats from 2007 to 2010. During this period he worked
on policies, including a pupil premium for schools in England,
which were implemented by the Coalition Government from
2010. Sam also worked on alternative proposals designed to
move the Party away from its opposition to university tuition
fees, though without complete success.
From 2012 to 2015, Sam was a Policy and Strategy Adviser
at Regent’s University London, a private university awarded
university title in 2013.
A graduate of the University of Nottingham, Sam has written
for Total Politics, HE and Wonkhe. In 2013 he wrote Smarter
Accountability in Further Education, which was published by
CentreForum, a UK think tank.
Sam is a New Zealand citizen and moved to Wellington from
the UK in 2015 where he works for Statistics New Zealand.
Nick Hillman, HEPI Director
The history of New Zealand and the history of the UK are closely
intertwined. But New Zealand is a small country compared to
the UK, with a population of under five million. So it might be
expected that New Zealand’s policymakers have more to learn
from the UK than vice versa.
In fact, New Zealand’s smaller size can make it easier to
implement innovative new policies. Time after time, it has
proved of interest to UK policymakers. For example, in the
1990s, the UK sought to learn from New Zealand’s civil service
reforms and in the 2000s, we learnt from their pension reforms.
Now, as this wide-ranging paper shows, we could learn much
from their higher education sector, which is the only one in
the world where every single university is in the top 3 per cent
The potential lessons cover areas such as:
• the consequences of removing student number controls;
• the growth of challenger institutions;
• the retrieval of student loans from graduates who have
moved overseas; and
• the recruitment of international students.
2 Higher Education in New Zealand: What might the UK learn?
HEPI is a UK-wide body. While it is challenging to keep on top
of the volume of change going on in higher education across
all four parts of the UK, it is also important that we keep an
eye on changes elsewhere in the world. Otherwise, we will miss
important lessons for our own higher education sector.
That is why, in 2014, we published a set of reports looking at
the Australian higher education sector and why, in 2015, we
published a detailed study comparing the UK and German
higher education systems. Now, we shine our spotlight on New
While we hope this study will, above all, provide useful lessons
for UK policymakers, we also hope it will be read with interest
in Wellington as well as in Westminster.
Higher Education in New Zealand
New Zealand UK
Population 4.6m 65m
Universities per head 1:575,000 1:461,000
Students (men:women) - Bachelor's degree
or higher 209,000 (1:1.4) 2.3m (1:1.3)
People aged 25-34 with a diploma or higher
qualification (2014) 40% 48%
% of undergraduates studying part-time 23% 20%
International students (Bachelor's and
higher) as a % of student body 15% 18%
University staff (FTEs) 20,000 275,000
Completion rate (within 9 years) 83% 82%
Average domestic tuition fee (university) £2,718 £8,830
International fee revenue (universities) £146m £3,240m
Tertiary education spending as a % of GDP
in 2011 (public and private) 1.5% 1.2%
Research spending as % of GDP 1.16% 1.70%
World rankings (universities in the 2015/16
QS World Top 500) 8/8 71/141
Student loan income repayment threshold £8,588 £21,000
Figures taken from Universities UK, Higher Education in Facts and Figures, 2014;
and OECD, Education at a Glance, 2014. Some data also come from the Higher
Education Statistics Agency (hesa.ac.uk) and the New Zealand Ministry of
Education (educationcounts.govt.nz). The figures are indicative rather than precise
and comparisons should be treated with caution.
Throughout this paper an exchange rate of £1 = 45 NZ cents has been used.
4 Higher Education in New Zealand: What might the UK learn?
New Zealand’s Tertiary Sector – An Overview 8
The Cost of Student Loans 15
Private Providers and the Demand-Led System 25
Increasing Repayments from Borrowers Overseas 31
International Recruitment 41
6 Higher Education in New Zealand: What might the UK learn?
Despite being far smaller, New Zealand’s higher education
sector has many similarities with the UK’s. Universities in both
countries generally deliver good outcomes, with graduates
enjoying better employment prospects and higher lifetime
earnings than those who do not enter higher education.
Both countries’ higher education systems perform well in
international rankings and have high completion rates.
New Zealand often adapts ideas adopted in the UK. This
includes the introduction of the Key Information Set (KIS).
The Performance Based Research Fund resembles the UK’s old
Research Assessment Exercise. The New Zealand student loan
scheme is modelled, in part, on the Australian system, but is
also similar to the income-contingent system in England and
enables students to study without paying up front fees.
The similarities between the two systems mean that they face
many of the same challenges. In some cases New Zealand is
ahead of the UK in its efforts to tackle them and these are one
focus of this paper.
Addressing the cost of the student loan scheme
The New Zealand Government has adopted a range of measures
to drive down the costs of its student loan scheme. These have
included increasing the repayment rate for graduates while
also reducing the ability of institutions to raise their fees. In the
UK, England has recently considered some similar measures
and may wish to go further in the coming years.
Private providers and the demand-led system
Between 1999 and 2002, New Zealand experimented with a
demand-led tertiary education sector, while also encouraging
private providers to enter the system. Costs soared and
number controls were reintroduced. Student number controls
in England have been abolished and non-HEFCE funded
providers have become a more significant element of the
higher education sector. There is therefore scope for New
Zealand’s experience to inform policy developments in the UK.
Securing repayments from domestic students who have gone overseas
The UK and New Zealand have struggled to ensure graduates
who move abroad repay their loans. New Zealand has introduced
a number of initiatives to retain contact with overseas students,
which go beyond anything in the UK. Legislation which means
those behind in their repayments can even be arrested at the
Attracting international students
With tight public funding, New Zealand’s universities are
increasingly reliant on international students as an important
revenue stream. In recent years, the country has adopted a
detailed and comprehensive strategy which could serve as a
template for the UK to follow.
Given the challenges faced by the two sectors are so similar, it is
remarkable that there is not closer collaboration. It is hoped this
paper will inform people in the UK of the actions New Zealand
has taken and go some way to enabling a greater sharing of
experiences to inform future policy work.
8 Higher Education in New Zealand: What might the UK learn?
New Zealand’s Tertiary Sector – An Overview
New Zealand has an integrated tertiary education sector
of which higher education (degree level and above) is one
Tertiary education covers all levels of post-school education
• foundation education (basic literacy and numeracy);
• applied and vocational training;
• higher education (degree and postgraduate education); and
• community education.
Nearly a third (31 per cent) of the 144,000 students who
completed a tertiary qualification in 2013 did so at Bachelor's
level or higher.
New Zealand’s tertiary sector consists of a number of different
categories of provider, including:
• Universities – there are eight universities providing extensive
degree and postgraduate education, which also host New
Zealand’s Centres of Research Excellence.
• Wānanga - New Zealand’s three wānanga provide education
using Māori styles of teaching and learning.
• Private training establishments (PTEs) – over 200 PTEs,
which are not state owned and often specialise in a specific
industry or area of study, usually with a vocational focus.
Most are approved by the Tertiary Education Commission
so receive direct Government funding. Students enrolled on